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| Version 0 | Version 1 |
|---|---|
| US banks make shock status switch | US banks make shock status switch |
| (about 1 hour later) | |
| The last two major investment banks in the US have changed their status to become bank holding companies, allowing them to take deposits from investors. | The last two major investment banks in the US have changed their status to become bank holding companies, allowing them to take deposits from investors. |
| The changes should enable Goldman Sachs and Morgan Stanley to raise more funds by opening commercial banks. | The changes should enable Goldman Sachs and Morgan Stanley to raise more funds by opening commercial banks. |
| The move - part of a huge restructuring effort on Wall Street - will also give them access to Federal Reserve support. | The move - part of a huge restructuring effort on Wall Street - will also give them access to Federal Reserve support. |
| The US government has announced a $700bn (£382bn) package to tackle the worst financial crisis for decades. | The US government has announced a $700bn (£382bn) package to tackle the worst financial crisis for decades. |
| Congress is considering the plan, drawn up by Treasury Secretary Henry Paulson, which would set up a fund to buy back much of the bad debt held by financial institutions. | Congress is considering the plan, drawn up by Treasury Secretary Henry Paulson, which would set up a fund to buy back much of the bad debt held by financial institutions. |
| Mr Paulson has urged other countries to follow the American example in dealing with the international financial crisis. | Mr Paulson has urged other countries to follow the American example in dealing with the international financial crisis. |
| Bank vulnerability | Bank vulnerability |
| Both presidential candidates have been having their say about the financial crisis. | Both presidential candidates have been having their say about the financial crisis. |
| Republican John McCain had stinging words for President George W Bush, saying he should take the blame for the crisis along with both parties in Congress. | Republican John McCain had stinging words for President George W Bush, saying he should take the blame for the crisis along with both parties in Congress. |
| Mr McCain said he was enraged by the greed of Wall Street speculators and said the rescue plan should be funded by cutting government waste, rather that through taxation. | |
| Meanwhile Barack Obama, for the Democrats, suggested Mr Paulson could be asked to play a role in his administration should he win the presidency. | Meanwhile Barack Obama, for the Democrats, suggested Mr Paulson could be asked to play a role in his administration should he win the presidency. |
| But Mr Obama criticised the bail-out proposal, calling for independent supervision of its implementation. | But Mr Obama criticised the bail-out proposal, calling for independent supervision of its implementation. |
| Investment banks have proved particularly vulnerable to the economic malaise - with Lehman Brothers going bankrupt this week and Merrill Lynch being sold to the Bank of America. | Investment banks have proved particularly vulnerable to the economic malaise - with Lehman Brothers going bankrupt this week and Merrill Lynch being sold to the Bank of America. |
| Shares in Goldman Sachs and Morgan Stanley came under severe pressure amid the struggles of their fellow investment banks. | Shares in Goldman Sachs and Morgan Stanley came under severe pressure amid the struggles of their fellow investment banks. |
| Analysts speculated that both institutions would be acquired by commercial banks, whose ability to take deposits would give them a stable source of funding. | Analysts speculated that both institutions would be acquired by commercial banks, whose ability to take deposits would give them a stable source of funding. |
| Instead, the banks filed requests with the Federal Reserve to change their status. | Instead, the banks filed requests with the Federal Reserve to change their status. |
| And late on Sunday, the Fed said in a statement it had granted the requests. | And late on Sunday, the Fed said in a statement it had granted the requests. |